In options trading, is the appreciation of a put or call based on percentage or dollar value?

Question

Stock options.

Answer 1

The price of an option is determined by the following factors:

The type of option (put or call)
The type of settlement (American or European)
The strike price of the option
The price of the underlying
The amount of time before expiration
The implied volatility of the option, and
The carrying cost (the "risk free" interest rate and any dividends expected before expiration if the underlying is stock.).

The amount an option appreciates/depreciates in value due to a change in the price of the underlying is called delta and it is a percentage of the amount the price of the underlying goes up. However, as the price of the underlying changes, delta also changes, by an amount known as gamma.

In some cases the amount the price of the option changes due to delta can be less than the amount the price of the option changes due to a change in implied volatility, known as vega. If a lot of people are expecting an earning surprise for some company, and there is no surprise when earnings are announced, it is not uncommon to see the price of both calls and puts drop due to the decrease in implied volatility.

Answer 2

Not sure what you mean by that. Stock, index and futures option prices are quoted in points, which have certain dollar value attached to them. OTC options are usually quoted in volatility or as a percentage of the spot.